Company Number: 13152782

Analysis Date: 2025-07-20 14:49 UTC

Financial Health Assessment for TAYLOR ACCOUNTANCY LTD

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1. Financial Health Score: B

Explanation:
The company shows solid financial footing with positive net assets and working capital, indicating a fundamentally healthy financial position. However, the moderate size and relatively recent incorporation (2021) combined with some fluctuations in current liabilities and cash reserves suggest room for improvement in liquidity management and growth stability. The "B" grade reflects a stable business with healthy cash flow but still maturing and needing careful monitoring.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Current Assets	£27,279	Adequate liquid assets primarily in cash, good short-term resource availability.
Cash at Bank	£26,654	Very strong cash position, critical for meeting immediate obligations and operating expenses.
Debtors	£625	Low level of receivables, indicating efficient collections or minimal credit sales.
Current Liabilities	£1,938	Significantly reduced from prior year (£6,904), showing improved short-term debt management.
Net Current Assets	£25,341	Healthy working capital, indicating the ability to cover short-term debts comfortably.
Net Assets / Shareholders' Funds	£30,069	Positive equity base, showing accumulated retained earnings and a solvent capital structure.
Fixed Assets (Tangible)	£4,728	Investment in computer equipment increased, signaling reinvestment in operational capacity.
Profit & Loss Reserve	£30,059	Accumulated retained earnings indicate profitable operations to date.
Number of Employees	2	Small but growing workforce, consistent with small company profile.

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3. Diagnosis: What the Financial Data Reveals

TAYLOR ACCOUNTANCY LTD presents with symptoms of a financially healthy small business that is effectively managing its cash flow and liabilities. The company’s liquidity—measured by cash and net current assets—resembles a strong heartbeat, showing it can meet short-term expenses without strain.

The significant drop in current liabilities from £6,904 in 2023 to £1,938 in 2024 reflects active debt reduction or improved payment terms, easing financial stress and reducing risk of liquidity shortfalls.

Fixed assets have increased through acquisition of computer equipment, highlighting investment in business infrastructure, which is a positive sign of growth and modernization.

The company’s net assets and shareholders’ funds demonstrate a stable capital base, with retained earnings indicating that profits are being retained to support future operations rather than distributed.

The low debtor balance suggests that the company maintains a tight credit policy or efficient collection processes, reducing the risk of cash flow interruptions due to late payments.

Overall, the company is in a stable state, without any obvious financial distress symptoms such as negative working capital, high leverage, or cash shortages.

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4. Recommendations

To maintain and improve financial wellness, consider the following:

• Maintain healthy cash reserves: Continue to monitor cash flow closely to sustain liquidity, especially given the small scale and growth phase of the company.
• Manage liabilities prudently: Keep current liabilities low relative to current assets to preserve strong working capital. Negotiate favorable payment terms with creditors.
• Expand debtor base carefully: If business growth involves extending credit, implement strict credit controls to avoid cash flow risk.
• Capital reinvestment: Continue investing in technology and equipment that support operational efficiency and scalability.
• Profit retention vs. distribution: Balance retaining earnings to fund growth with rewarding shareholders to maintain morale and investment appetite.
• Growth planning: With only two employees, consider human resource planning aligned with growth projections to avoid "overstretching" resources.
• Financial reporting: Though exempt from audit, consider voluntary audits or reviews for enhanced credibility with clients and lenders as the business scales.

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